Australian unions plan to extend Inpex LNG strike by two weeks

By Helen Clark

June 15 (Reuters) - Australia's Offshore Alliance plans to extend until July 6 action that could disrupt liquefied natural gas shipments, it said on Monday, after a tribunal rejected plant operator Inpex's bid to halt the strikes at Ichthys LNG.

Previously, the strike in Australia, which is the largest LNG exporter after the United States, was expected to end on June 23. 

Inpex said in an emailed statement to Reuters that the actions were anticipated to create a production disruption at both offshore and onshore facilities.

"In the context of current global fuel supply constraints, the disruption is expected to be significant," said Inpex Senior Vice President Corporate, Bill Townsend.

Inpex also said that it was preparing an updated offer for the workers.

The Offshore Alliance, which includes the Australian Workers Union and the Maritime Union of Australia, in a Facebook post blamed the extended action on "intransigent" conduct by Inpex's industrial relations manager.

"INPEX have failed to meet the deadlines agreed in the FWC last night, to lock in the jobs of our members," the union group said in its Facebook post, referring to the industrial relations tribunal, the Fair Work Commission.

ENERGY MARKETS FALL ON IRAN PEACE PROSPECTS

Energy markets have not obviously reacted to news of the extended strike action, but already global supplies are tight following months of disruption linked to the Iran war and the closure of the Strait of Hormuz.

Energy prices fell on Monday following news of a preliminary deal to end the war.

Japan's Inpex said during a hearing before Australia's industrial relations tribunal on Saturday that the Ichthys facility was at risk of reaching full storage as a result of a loading ban on all hydrocarbons that is part of the strike.

The hearing was convened for Inpex to argue the strike must be overturned on national interest grounds, but the case was dismissed.

LNG "tank tops" will be reached by the middle of the day on Wednesday and condensate storage will hit maximum capacity the following day.

Inpex could in theory slow offshore production but this could cause technical challenges that could also lead to a shutdown. Repairs cannot be undertaken under the work bans in place during the strike.

Four LNG cargoes are due for loading during the initial strike period and another three to July 2, according to evidence given by Inpex on Saturday.

As a concession, unions cut back striking time from eight hours a day to four, with a two-hour ban on work in the morning and another in the evening. From June 24 the strike time reverts to two four-hour blocks, according to documents reviewed by Reuters.

The Offshore Alliance had led bargaining with Inpex since last year and first threatened strike action in April. The Electrical Trades Union is also part of the strike, which seeks better pay, career progression and job security.

Ichthys accounts for about 10% of LNG supply from Australia.

(Reporting by Sameer Manekar and Sneha Kumar in Bengaluru and Helen Clark in Perth; Editing by Sonia Cheema, Barbara Lewis and Tomasz Janowski)